The Corporate Transparency Act (CTA) is officially in effect, bringing new reporting requirements for businesses across the United States. While this regulation aims to combat money laundering, fraud, and corruption, it also introduces an important filing responsibility that business owners and side hustlers need to address.
What Is the BOI Report?
The Beneficial Ownership Information (BOI) report is a one-time filing required under the CTA. Its purpose is to create transparency about who owns and controls U.S.-based and foreign-registered entities.
This report applies to most businesses, with exemptions for heavily regulated industries like banks and insurance companies, large operating companies (20+ employees), and tax-exempt organizations. If your business doesn’t fall into one of these exempt categories, chances are you’ll need to file.
Who Needs to File?
Whether you run a small business, a side hustle, or a newly formed entity, compliance is critical. Filing deadlines depend on when your business was created:
- Existing businesses (formed before January 1, 2024): File by January 1, 2025.
- New businesses (formed in 2024 or later): File within 90 days of formation.
- Future businesses (formed after December 31, 2024): File within 30 days of formation.
- Ownership changes: Update your BOI report within 30 days of any changes.
The good news? Filing is a one-time process—unless there are changes in ownership, which require updates.
Why Filing Matters
Failing to file the BOI report can result in steep penalties, including fines of up to $10,000 and even potential jail time. While enforcement is still evolving, the penalties underscore the importance of compliance. Filing protects your business from these risks and ensures you stay on the right side of the law.
How to File Your BOI Report
You have two options for filing:
- Self-file: Visit FinCEN’s online portal to complete the process independently.
- Get professional help: Reach out to your advisor who can connect you with a qualified CPA.
Take Action Now
The CTA introduces a layer of complexity that many business owners may not have anticipated, but staying compliant doesn’t have to be overwhelming. By understanding the requirements and acting promptly, you can avoid penalties and focus on what you do best—running your business.
